Cambria CSD running out of cash

August 20, 2015

water bankThe Cambria Community Services District could run out of operating cash in about three months, District General Manager Jerry Gruber said. [Tribune]

The district’s financial troubles center around its emergency water supply project, which costs approximately $13 million, including state grant funds. But, the grant funds are in limbo, and the district is battling a costly lawsuit over the project.

On behalf of the CSD, San Luis Obispo County applied for a $4.3 million grant to offset expenses for building and testing Cambria’s new water treatment plant. The plant was constructed and test-operated for three months earlier this year.

The grant is available to the county and subsequently the CSD through Proposition 84 funds for drought-related projects. But, for the state to release the funds, the Department of Water Resources (DWR) must approve the project.

Over the past few weeks, the DWR has raised several concerns about the project. Concerns include the CSD’s water management plan, or lack thereof, and the lawsuit the project has prompted.

Last year, environmental group LandWatch of San Luis Obispo County sued the CSD, alleging it breached state law by rushing through the project. LandWatch argued the district violated the California Environmental Quality Act by skipping regulatory steps required to gain approval of the project.

If the lawsuit is successful, the district would have to repay the $4.3 million grant to the state.

Still, Gruber says the state is willing to release the funds. Gruber said, though, he believes county counsel has recommended the board of supervisors not pass on the funds to the CSD.

County Administrator Dan Buckshi said he questions how the district would manage to repay the funds, if it lost the lawsuit.

Gruber is requesting that the board of supervisors take the risk and deliver the grant money to the district. The general manager projects the district will have slightly more than $1 million in cash by the end of August and will run out of cash in about three months, if the grant funds are withheld.

Additionally, the district will spend nearly $250,000 battling the lawsuit, Gruber said. The district has already spent $160,000 on its legal defense.

Even if the plaintiffs prevail in the lawsuit, the Cambria CSD will not have to abandon its emergency water supply project, district spokesman Tom Gray said. In the worst case scenario, the district would have to wait until it receives a regular permit to operate the project, Gray said.

The project was approved under an emergency permit.


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CambriaKing

Thank heavens for Land Watch…they are really making things better.


CentralcoastRN

Ok, so there are concerns about giving MILLIONS to CSD because they don’t have a water management plan? Is that right? Did they have the same “no plan” when they were given MILLONS to build this plant and run it 3 months ago? Another poster refers to a potential conflict of interest. Sigh.


I really don’t get it. Someone please explain it to me, because if I wanted millions of dollars for a project, I would have to go to a bank and clearly/precisely show them how my idea would work. I would have to have a business plan. Then MAYBE, if everything made sense, I would get the money.


So there is a plant in Cambria that cost millions to build, that isn’t running. They don’t have full staffing it seems, as Julie pointed out there were 1 FT and 1 PT vacancy, even if it WERE running.


So yet again, the people of Cambria are being held hostage. Why was this project chosen over other ideas mentioned by other posters? Does anyone know?


Doesn’t this seem overly basic? LIke, you guys had ONE job. Treat some water. Like, with a plan and stuff.


65buick

I think what is missing with CSDs and many government bureaucracies is that those in charge don’t really care of things go wrong. They don’t have to deal with the failure. They make a mess, they leave. And the long-term property owners and businesspeople are left to sort things out.


r0y

You left out “…and fleecing the ratepayer / taxpayer all the while” on your claim.


Fixed.


Julie

Cambria is in big trouble! Even with careful management of cash, staff projects possible cash deficiencies over the next six months as shown in their cash flow projections.


From yesterday’s staff report:


The District has now implemented measures to minimize cash expenditures until the District receives the Proposition 84 grant funds of $4,300,000 which have been awarded. Those measures include the following:

-not filling vacancies: one in Water, one in Wastewater, and two part-

time in Administration;

-postponing pay raises for management and confidential employees;

-charging full rates for use of Vet’s hall;

-deferring all possible maintenance and other expenditures;

-negotiating with vendors for delayed payments (staff is withholding more than $1 million in

payments due to EWS contractors until grant funds are received);

-reducing role of labor negotiator;

-postponing further expenditures for East Park improvements;

-working with senior SLO County staff to expedite processing of payment of $4.3 million

Prop 84 Grant;

-working with Regional Water Quality Control Board to request reduction in required

monitoring to reduce costs of monitoring; and

-recommending to CCSD Board of Directors to allow outside irrigation at least

one day per week at August Board meeting to help mitigate impact of drought on trees and to generate additional revenue for the District.

Even with careful management of cash, staff projects possible cash deficiencies over the next six months.


Stunned

I hate it when I see poverty stricken people fighting over water and food on late night commercials but, now I’m seeing the elite up on the hill who can’t seem to get it together and they have tons of cash flow but, they keep it hidden by suing each other!


Pelican1

As I have indicated several times…CSD’s don’t work. Their failure rate is high due to the lack of expertise and professionalism of those who choose to govern.


r0y

One could argue that for government in general. States. Counties. Cities. School boards. You name it, there’s likely a high failure rate. So high that most only seem adept at covering their failures for a time. Sooner or later, it does come out in the open (hopefully by then we’ll have another Cecil the Lion to occupy us. Oooo. Shiny.)


Francesca Bolognini

There are several of us in Cambria who have been concerned with our water situation and have advocated for much more affordable and environmentally compatable solutions for our problem over the years. Off stream storage, for example, which would come in real handy during the record El Nino we are in line to receive this year. I have a 700 page report from Fish and Wildlife that outlines how to do it and all the agencies that would have helped. We could even have gotten funding from the state for the Steelhead rehab and watershed improvement it would have delivered, along with the MUCH CHEAPER water.


The problem with all the plans we offered is that they would not have facilitated further developement, only sustainability and a modest allotment of further building permits to people who were on the wait list before the morratorium was put in place due to lack of further resources. IMHO, anyone who put their name on that list after said restrictions was a speculator and we owe them NOTHING.


This desal project, which many of us have fought for years is the MOST EXPENSIVE way to procure water. It was promoted as the only solution through CCSD meetings where any other plans were not even considered and last year through a series of articles in The Cambrian that insisted that we would run out of water immenently, even though the CCSD web site showed above average levels for the time of year.


I need to point out here that the former head of the CCSD is a senior partner in the law firm representing both the builder and the installer of this plant. The firm, according to their own website mission statement, is in the business of defeating environmental law for developers.


And we could very well be looking at PRIVATIZED WATER here, since said CCSD members (excluding only one) signed a loan agreement that has a hair trigger 3 day (3 DAY!!!) default clause that would forfeit our infrastructure and the 434 acre Fiscalini Ranch Preserve (wouldn’t that make a nice developement!!!) to a holding company in Las Vegas if we are 3 DAYS LATE on a payment.


PUNCHLINE: WE HAVE NOT RECEIVED A DROP OF WATER FROM THIS FACILITY. It cannot even be run until we completely rebuild our sewer system (more $$$,$$$.$$) because of the “toilet to tap” component. The geniuses involved in this non competitive procurement, NO THIRD PARTY OVERSIGHT project seem to have overlooked the fact that there were way too many nitrates in the effluvient from our existing plant to be concentrated and dumped into San SImeon Creek without killing EVERYTHING. So far this desal monster has killed endangered species in mass quantities in the Creek by releasing chlorine, then depleating the oxygen and lets not forget that it makes noise like a jet engine and that is having quite an effect, as far as 6 miles up the creek.


This project was strongly opposed by Fish and Wildlife, the Coastal Commission and a laundry list of environmental groups because it is located in a Marine Sanctuary, a wetland full of endangered species, and right next door to a $35,000,000.00 San Simeon Camp Ground. During opporation, toxic effluvient from the evaporation ponds is being sprayed into the air and drifts right over to the camp ground.


Anyone looking to blame over regulation for this one should think about what I am saying here. Look into it yourselves. The real problem is a complete LACK OF OVERSIGHT. The governor bypassed all the checks and balances that would have protected us and gave these guys a pass for a free for all under the guise of an “emergency” which they have turned into an “anything goes” nightmare. The group bringing the law suit is doing its job to provide environmental oversight and if you actually look at the figures, we could not have possibly afforded the plant, even without the legal action.


Perhaps, given the overwhelming circumstances, someone like the installers will be found at fault for the fact that the design was not workable under our circumstances or that someone was in collusion during the process. In that case it would be a criminal case and our citizens would be off the hook. Otherwise, this could become the perfect storm of PRIVATIZED WATER, LAND GRAB AND INAPPROPRIATE DEVELOPEMENT.


OnTheOtherHand

I have no dog in this fight and little knowledge of the water/sewer situation in Cambria. Mr. Bolognini makes a coherent argument that is worth considering — providing it is also factually accurate and not selectively so.


Does anyone from the other side have a response that challenges his arguments with facts — not labels or other ad hominem attacks?


Julie

How did the residents of Cambria allow the loan for the project be secured by the amazing Fiscalini Ranch the community worked so hard to get?


http://www.visitcambriacalifornia.com/golocal/fiscaliniranch.html


Has anyone looked into the language in the monies contributed for the property’s purchase from American Land Conservancy, the State Coastal Conservancy, and San Luis Obispo County that would preclude the property’s sale/lien?


This alone smells really bad.


scoopone

So, the town had to actually run out of water in order to avoid a lawsuit; that makes a lot of sense. I suppose this might happen to other communities if we have another dry year or a dry decade (which past history has shown that a 10-year drought has happened

more than once).



Looks like we’re screwed no matter what we do regarding desalination.


Francesca Bolognini

We are not actually in real danger of running out, as long as we conserve. I am very proud of how we pulled together as a community to do just that. There are deffinately other options available to us, most of which make infinitely more sense economically and environmentally. They will not make these third party scavengers filthy rich, though, so there is the rub.


racket

We all lose with so many competing layers of government.